Beef prices: factories anxious for more cattle

Beef numbers are starting to tighten, which is leaving factories having to work harder to maintain the same level of throughput.

The weekly kill is still higher than normal, but so too is demand and this is what is driving factory appetite. Plants are also starting to fill orders for the Christmas trade which is further boosting demand.

While there is more purchasing activity, factories are keen to try to keep a lid on price.

The general run of prices is a base of €3.75/kg for steers and €3.85/kg for heifers.

There are still plants quoting a 5c/kg lower base for deals involving small numbers of cattle, but these are the minority and sellers should take note of the strength in the trade.

At the top of the market, sellers with significant numbers of heifers on offer are securing a base of €3.88/kg to €3.90/kg, with some plants holding at the €3.85/kg base but offering allowances on or covering transport costs in a bid to entice sales forward.

Last week’s kill reduced by about 2,000 to 36,141 head.

This was due to a combination of tighter supplies, but more so by storm Brian interfering with throughput on Monday and Tuesday. It is likely that the kill will continue to tighten given the low number of cattle remaining at grass.

The exception to this could be in the cow category, with throughput boosted by culling in dairy herds.

Reports suggest there is also more bite in the cow trade, with specialist finishers and those handling higher numbers in the driving seat.

This is leaving an even greater differential in prices.

For example, P+3 grading cows are trading in small numbers from under €3.00/kg to €3.20/kg, with O grades from €3.20/kg to €3.35/kg.

There are also reports of very large numbers of fleshed P and O grades selling flat at €3.30/kg to €3.35/kg. R grading cows are selling from €3.35/kg at the bottom of the market to €3.50/kg to €3.55/kg for heavy fleshed cows, while U grades range anywhere from €3.45/kg to €3.60/kg in cow specialist plants.

The young bull trade is steady, with R grades selling in the main from €3.80/kg to €3.85/kg. U grades are selling for €3.90/kg to €3.95/kg, with specialist finishers securing a higher payment by means of bonus premiums.

O grading bulls are selling anywhere from €3.65/kg for plainer-quality Friesian bulls to a top of €3.75/kg to €3.80/kg for better-quality continental-cross bulls traded as part of a mixed batch of bulls.

Bulls less than 16 months and trading on the grid are selling on a base of €3.75/kg to €3.80/kg on average.

Northern trade

The northern trade is steady, with most plants remaining on a U-3 base quote of £3.52/kg. At Wednesday afternoon’s exchange rate of 88.8p to the euro, this is the equivalent of €3.96/kg, rising to €4.18/kg when VAT is included at 5.4%.

Last week’s prime cattle kill increased by 119 head to 6,980, with the cow and bull kill also increasing by about 100 head to 2,584.

There is also a significant differential in prices paid between plants, with O grading cows trading from £2.60/kg to £2.80/kg (€3.09/kg to €3.32/kg including VAT).

The British price has eased by 1p/kg to 2p/kg further, with R4L steers averaging £3.76/kg (€4.46/kg incl VAT), while heifers are 2p/kg lower at an average of £3.74/kg (€4.44/kg inc VAT). The British cow price has also eased slightly, with all grades falling by an average of 1.8p. AHDB price analysis shows O+4L cows trading at an average of £2.77/kg (€3.28/kg).

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